Gold Shorts Becoming More Aggressive

December 7th, 2014
in gold

by Poly, Zentrader

This is an excerpt from this week's premium update from the The Financial Tap, which is dedicated to helping people learn to grow into successful investors by providing cycle research on multiple markets delivered twice weekly. Now offering monthly & quarterly subscriptions with 30 day refund. Promo code ZEN saves 10%.

Follow up:

Since my last gold update, one week ago, gold has added just $10 during a period of the Cycle where the majority of the gains should have occurred. On the surface, yet again, more of the indecisive type of action that has in the past inspired short sellers to become more aggressive.

As they have done during past lightly traded holiday periods, the shorts came out firing into the thinly traded market with the goal of running the stops on gold. Obviously, they succeeded in doing so with Silver, at one point during the assault sinking it by over 10%, another classic after-hours raid of a market devoid of "active traders".

But a very curious development occurred this time, one that I feel has been given far too little attention to date. Not only did gold repel the battering, but it staged a rather impressive reversal. The real tell though was in the silver pits, where 6 year lows were reversed to produce one of the biggest daily price movement in decades. This is significant, because the raid occurred during a very vulnerable time in the Cycle. The type of weakness and vulnerability we've seen these past 3 years would have been no match for this type of raid. A continuation of the bear market would have immediately ensued, leading me to believe that the character of this market has changed.

On the flip side, the gold sector isn't exactly flying either, so I must categorize the overall evidence here as being slightly conflicting. The natural tendency is for this market to continue to be sold, that's the primary trend. So seeing less than stellar buying here I attribute more towards nervousness rather than outright weakness. With past new Investor Cycles, we would experience these sharp, counter trend and short covering moves. But not so this time around, possibly suggesting that this action is bottoming behavior rather than counter-trading.

So overall, I still consider the developments here as constructive, mainly because we have a Day 15 Cycle high now. That is almost always going to mark a Right Translated Cycle, which confirms my count where this is a 1st Daily Cycle.

We're getting close to a Cycle top now; I believe many people are expecting one. But I also know that 1st Daily Cycle's average 29 days in length and the top comes on Day 19. We're cutting it close, but I would like to see one last 3 to 5 day push higher first to force some of the short speculators to capitulate. On the downside, just watch the trend-line and the 10dma (currently $1,195). A close below that moving average, this late in the Cycle, will certainly signal a DCL is coming.

12-3 Gold Daily

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

 navigate econintersect .com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2018 Econintersect LLC - all rights reserved